For car dealers, the opportunity to create loyal customers might start with a sale, but true loyalty is created in the service department. According to a 2017 IHS Markit study, the average length of car ownership is nearly seven years. That’s a long time to maintain a relationship with someone until the next sales cycle.
So, the focus must be to keep the customer coming back for service. How is this best accomplished? Let’s look the four types of loyalty and what drives customers to choose your dealership versus another dealership or an independent repair facility (IRF).
1) Relationship. This is where your customers get to know and like a service advisor and other service employees.
2) Needs are met. This is when the customer feels that every time they bring their vehicle in, the problems are identified and solved. They don’t have to worry about something going wrong after the fact.
3) Convenience. Some customers are loyal to dealerships based on location or hours.
4) Value Proposition. You might believe that cost is a major factor in loyalty, but this is actually not the case. I personally drive past five or six IRFs every time I drive to my dealership to get my car serviced. I know I could get an oil change for cheaper somewhere else, but I like the fact that my dealership uses OEM parts and I can wait in a comfortable waiting room.
Some, if not all of these factors contribute to customer loyalty, but the common denominator in all these types of loyalty is trust. Trust is a sacred bond in any relationship, and once broken is not easily rebuilt.
What’s the best way to build trust with your customers?
There are three steps involved: engagement, relevant messaging and omnichannel marketing.
Engagement starts in the dealership, but only 30 percent of customer interactions with your dealership actually happen in the dealership. Once the customer leaves, how do you continue that engagement? You must be able to engage your customers with relevant, consistent messaging in places where customers spend their time.
When it comes to service marketing, relevancy is critical. If you tell a customer in the service lane that they need new brakes, but then send the a coupon for an oil change, that doesn’t make sense.
The frequency of your message is also important. In marketing we have something called the Rule of 7, which states that a customer needs to “hear” your message at least seven times before they take action to buy a product or service.
That’s why omnichannel marketing is the most cost-effective means to deliver your message. Omnichannel marketing combines the power of customer data, vehicle service history, online behavior and predictive analytics to deliver the right message to the right customer at the right time.
These days, it’s especially important to include social media in your service marketing strategy. The average person spends 135 minutes a day on social media platforms and even more time on the Internet. Are you service messages being delivered to customers via social media? If not, you’re missing out. Take a look at these response rates using different marketing channels.
- Direct mail campaign alone – 6%
- Direct mail + social display – 20%
- Direct mail + email – 27%
- Direct mail + email + social display = 37%
The more channels you add, the higher lift you will see in ROs and the more service revenue you will generate. For example, adding social channels alone to service marketing adds an average 3.9% lift in ROs and nearly $300,000 in RO revenue per year.
To achieve these results, start with your manufacturer’s owner retention program (ORP). Make sure you maximize everything your OEM is offering.
Then, look for a digital marketing provider that can add social display, display advertising, additional email campaigns and PPC for service. Make sure the provider can align their messaging with your ORP messaging.
Additionally, leverage the power of triggered communications. Based on mileage or vehicle service history, these automatic reminders are sent to customers when it’s time to bring their vehicle in for service. Because they’re so personalized, triggered communications are most cost-effective when delivered through email and social media.
Finally, consider a customer rewards program. Programs that allow customers to accumulate points that can be redeemed towards additional service or aftermarket products are ideal, because they encourage multiple visits to your dealership.
Building trust with your customers requires continuous engagement, consistent messaging and an omnichannel marketing approach. Generic service offers that are sent via email and direct mail aren’t compelling enough to keep customers returning to your dealership for the next seven years, until they’re ready to buy again. Does your service marketing program leverage these strategies to build loyal customers?
Marketing | April 02, 2020